Market snapshot: Wall Street, airlines and lockdown

Mixed messages from the White House on fiscal stimulus were not enough to deter the return of bullish sentiment overnight.

Mixed messages from the White House on fiscal stimulus were not enough to deter the return of bullish sentiment overnight.

While a sweeping fiscal package is not now expected until after the conclusion of the November election, a number of measures were nonetheless proposed. In particular, there is likely to be a targeted, piecemeal approach which would be of benefit to industries, small businesses and consumers. 

The moves come ahead of US employment data later, where jobless claims are expected stubbornly to remain above 10 million, further underlining the economy’s need for a further fiscal shot in the arm.

The Dow Jones has now all but recovered the year’s losses, standing down just 0.8% in 2020. Meanwhile, the S&P500 is ahead by 5.8% and the Nasdaq remains the investment destination of choice, up by 26.7% in the year to date.

In the UK, further rumoured lockdown measures provide little cause for cheer, as the embattled economy looks for sources of optimism. The likely impending pressure on the consumer could have further implications for the hospitality and leisure sectors.

Meanwhile, the airlines remain in fight rather than flight mode, conserving capital in any way possible, as evidenced by some of the measures announced today by easyJet (LSE:EZJ) following the halving of passenger numbers due to the pandemic.

The stuttering negotiations between the UK and the EU are larger on rhetoric than action at present, with the possibility of a no-deal drawing closer by the day. 

The FTSE 100 has opened tentatively in positive territory, but still remains down by 21% so far this year, as the banks potentially brace for a bout of further bad debt provisions in the event of a deteriorating economic backdrop.